The reforms to the IMF that the Obama Administration had submitted to Congress as part of its appropriation bill (and the good news is that Congress did agree on aspects of appropriations, removing the threat of another federal shutdown for over nine months), were those agreed with much fanfare by the G20 in 2010. The reforms would have doubled IMF quotas to $720 billion and shifted 6% of quota to emerging markets (an IMF member's quota determines both its financial commitment to the Fund and its voting power). Europe was to reduce its current representation on the 24 member IMF Executive Board by two so as to make room for more directors from emerging markets. In addition, the formula for deciding quota allocations was to be revised and the next review of quotas was accelerated to January 2014. The expectation was that there would be a further shift in quota shares to emerging markets as part of this review.

The IMF Managing Director expressed her disappointment and noted that the reforms were to ensure that the governance structure of the IMF was brought into line with the changes in the global economy, particularly the rise of the emerging markets. Not surprisingly, the reforms are considered extremely important by the emerging markets and they also expressed their disappointment and called on the IMF to implement the reforms.

But it is not up to the IMF. It all depends on the US Congress. Major reforms in the IMF require an 85% voting share approval. With a share of 16.75%, the US has a veto. If the reforms had been passed, the US voting share would have declined only slightly and it would have maintained its veto. So the world waits for US leadership. When will that happen?

As Truman notes, US credibility has been damaged. The US will be less trusted to honour agreements in this area. The BRICS will continue to criticise the IMF as being excessively dominated by advanced countries and will continue to promote alternative bodies, such as a BRIC development bank and currency support arrangements. And the credibility of the G20 has also taken a body blow. The reform of IMF governance was meant to be one of its major achievements.

Australia is in the chair of the G20 this year and will need a handling strategy on IMF reform. The quota reforms that were to be completed by 2014 will not be advanced until the 2010 package is ratified. Oh how Australia wanted the US Congress to do the 'right' thing. So what now?

Here are my suggestions for what the G20 should do.

First, push on, but with a vengeance. Instead of issuing communiques saying, 'we are committed' to ratifying the 2010 package of reforms and 'we attach high importance to securing continued progress', as was the case in the St Petersburg declaration, directly criticise the US Congress for failing to support the reforms. The US Administration should not mind; it supports the reforms and has been battling to get them passed. Will the US Congress listen to the rest of the world? Unlikely. But for the sake of the credibility of the G20, it should at least try.

Second, put on the table the need to remove the US veto in the IMF by reducing the size of the 'super majority' voting requirements.

Thirdly, and importantly, move on from just talking about 'shares and chairs' when it comes to IMF reform and intensify the questioning as to whether the IMF is effectively fulfilling its responsibilities. For example, review whether it has been even handed in its treatment of members, and whether it can effectively provide a global financial safety net given the concerns of emerging markets over a possible increase in capital volatility. This would include looking at its relations with regional safety nets.

This is not to say that the G20 should be replacing the IMF's governance arrangements. But if there are concerns about the appropriateness of the Fund's governance and there is a blockage in advancing any reform, it is appropriate for the G20 to be asking the 'big' questions as to whether the IMF is performing the role that is required by the global community. In fact, if the G20 is a global economic steering committee, it should be doing this with respect to every international economic body.